Explosive demand for AI memory chips is transforming Samsung’s earnings outlook, even as supply constraints deepen across the semiconductor industry.
Samsung Electronics reported record quarterly earnings as surging artificial intelligence investment sharply boosted demand for advanced memory chips, while the company warned that supply shortages are likely to worsen in the coming years.
The world’s largest memory chipmaker said operating profit in its semiconductor division soared nearly 49-fold year-on-year, driven by rapid expansion of AI data centres worldwide. Companies building AI infrastructure are racing to secure long-term chip supplies, prompting Samsung to sign multi-year binding agreements with major customers, although specific partners were not disclosed.
Chipmakers are increasingly allocating production capacity to high-performance memory used in AI accelerators supplied by firms such as Nvidia. While this shift is strengthening profitability, it is also tightening availability of conventional chips used in smartphones and consumer electronics.
Samsung executives said demand projections already point to widening supply gaps through 2027, as building new fabrication plants requires years of investment and construction. Continued AI spending from global technology leaders including Alphabet, Amazon and Microsoft is expected to sustain momentum.
For the January–March quarter, Samsung’s chip division posted operating profit of 53.7 trillion won, accounting for the majority of total operating earnings of 57.2 trillion won. Overall revenue rose 69% year-on-year to 133.9 trillion won.
The company said geopolitical tensions have not disrupted production due to diversified sourcing of key manufacturing materials, though higher oil prices could increase transportation costs.
Samsung is also working to close the gap with domestic rival SK Hynix in high-bandwidth memory chips, beginning mass production of next-generation HBM4 products and planning higher capital spending to meet AI demand.
However, rising chip prices pressured other businesses, with mobile and display divisions reporting weaker profitability despite the semiconductor boom.
